Odd Lots Viktor Shvets On Why There’s No Going Back To Pre-COVID Capitalism
Aug 6, 2020
Viktor Shvets, Managing Director at Macquarie Group and author of "The Great Rupture," delves into how COVID-19 has forever altered capitalism. He argues against a return to pre-pandemic economic models, emphasizing the necessity of active fiscal policy and government intervention. Shvets discusses historical resistance to change in economies like China and Russia compared to the adaptability of Western Europe. He also explores the evolving dynamics of labor and capital, suggesting ideas like universal basic income as responses to shifting societal needs.
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Growth Over Productivity
- The global economy has consistently prioritized growth over productivity, financing it by pulling future consumption forward.
- This dependence on asset price inflation makes central banks averse to volatility, creating toxic monetary policies.
East vs. West
- Historically, societies like China and Russia resisted change while Western Europe embraced it, leading to their global dominance.
- Now, the question is whether the East is better positioned for the future given the changing role of government and technology.
Changing Investment Landscape
- The current investment playbook is obsolete because central bank intervention distorts market signals.
- Investors must adapt to a new environment where state intervention drives markets and short-term volatility is the norm.
